Total investment in Web3 companies increased by 55% in the first quarter of 2024, indicating a return to venture capital (VC) interest in cryptocurrencies.
In addition to a more than 55% increase in total investment value, the number of Web3 VC investment deals increased by 36% quarter-over-quarter in Q1 2024, according to the Q1 on-chain report by QuickNode and Artemis.
Artificial intelligence (AI) and gaming-related Web3 protocols accounted for the bulk of the investment. According to the report:
“[This indicates] Investments are increasing for the first time in over a year, suggesting a positive change in VC sentiment towards Web3. In particular, AI and gaming have seen the most notable resurgence in venture capital enthusiasm among these categories. ”
Further demonstrating VC interest in Web3, crypto-focused VC firm Paradigm has announced a $225 million investment in Monad Labs, which is building a new layer-1 blockchain network to compete with Solana. led the funding round. This round was announced on April 9th.
Two of the largest early-stage rounds this quarter were a $42 million Series B round by Berachain and a $35 million pre-seed round by 0G Labs, a data availability blockchain for AI protocols.
Seed round deals saw the biggest growth, up 53% quarter-over-quarter, suggesting increased interest in early-stage deals. Series A and seed funding rounds saw inflows nearly double compared to the previous quarter, “reflecting VCs’ renewed appetite to invest in Web3,” according to the report.
Related: 10 days left until halving, analysts predict Bitcoin high of $150,000
Interest in virtual currency VC reignites ahead of Bitcoin halving
Several notable investment deals have been announced in the lead up to the 2024 Bitcoin halving.
On April 9th, Bitcoin Layer 2 network Mezo announced the completion of a $21 million Series A funding round led by Pantera Capital. Mezo allows investors to earn a yield based on the time they hold their tokens. They describe this as the “Bitcoin economic layer.”
On April 3, reports surfaced that Paradigm was in talks to raise up to $850 million for a new fund, a record amount raised by Silicon Valley-based VC firm Andreessen Horowitz. This is the largest amount raised in the virtual currency industry since May 2022, when it raised $4.5. a billion.What’s wrong with Bitcoin halving? Source: Cointelegraph
Related: Binance Labs shifts investment focus to Bitcoin DeFi
